Evidence Proved False Claims Action by County Was in Retaliation
for Earlier Lawsuit, Justices Say

By KENNETH
OFGANG, Staff Writer

A doctor who
once headed the pathology department at a county hospital proved that Kern
County retaliated against him for an earlier lawsuit claiming he was
disciplined for complaining about medical quality issues, this district’s Court
of Appeal ruled yesterday.

Div. Six
affirmed a $50,000 attorney fee award in favor of Dr. David F. Jadwin, who won
a verdict of more than $500,000 in the 2009 trial of his earlier suit in
federal court. Jadwin presented sufficient evidence for Ventura Superior Court
Judge Henry Walsh to reject the county’s contention that its suit against
Jadwin for submitting false expense reports was unrelated to his federal
claims, the appellate panel held.

While “the
propinquity of two events does not necessarily establish cause and effect,”
Justice Kenneth Yegan wrote for Div. Six, “circumstantial evidence supports the
adverse factual finding.”

Paid Leave

Jadwin was
placed on paid administrative leave from his post at Kern Medical Center in
2006. He sued in the U.S. District Court for the Eastern District of California
the following year, charging employment retaliation, denial of due process, and
violation of state and federal statutes, including the Family and Medical Leave
Act, California Fair Employment and Housing Act, and California Family Rights
Act.

While that suit
was pending, Jadwin continued to travel to attend continuing education classes
and submitted a claim for more than $3,000 in reimbursement. The county accused
him of having falsified that claim and sued him under the False Claims Act.

The statute,
patterned after the Civil War-era federal act, permits a public entity to
recover treble damages from an employee or contractor who presents it with a
willfully false claim for public funds.

Suit Transfered

The action was
transferred to Ventura County—Jadwin having moved to Northern California in the
interim, giving him a statutory right to a neutral venue—and assigned to
mandatory arbitration. The arbitrator found for Jadwin and the county filed a
voluntarily dismissal.

Jadwin’s lawyer
moved to vacate the dismissal, claiming the county had filed it in order to
avoid having to pay attorney fees. Walsh agreed, ordered that judgment be
entered in Jadwin’s favor on the basis of the arbitrator’s award, and
subsequently found that the defendant was entitled to attorney fees under the
FCA because the suit was frivolous and designed to harass.

The judge,
citing the briefs and declarations of the parties, found that the county sued
without properly investigating the claim, gave “evasive and conclusionary”
responses to Jadwin’s discovery, and filed the suit as an “unlimited
jurisdiction” case even though “it could never have reached” the $25,000
jurisdictional threshold.

The county
failed to show reversible error, Yegan said, even under the pre-2010 version of
the statute, which permits an attorney fee award to a prevailing defendant only
upon a showing that the litigation was frivolous, vexatious, “or brought solely
for purposes of harassment. The current version reduces that burden to a
showing that the action was brought “primarily” to harass.

The justice
rejected the county’s contention that it had been subjected to a “double
whammy” because the arbitrator made no factual findings and the judge did not
allow it to present evidence that the suit was not frivolous.

Neither the
judicial arbitration statute nor the Rules of Court require findings of fact or
conclusions of law on the part of the arbitrator, and it cannot be assumed that
the trial jurist acted “cavalierly” in his evaluation of the briefs and
declarations, Yegan wrote.

Circumstantial Evidence

While much of
the evidence was circumstantial, the justice went on to say, it was sufficient
to establish that the county sued without probable cause or continued the suit
after realizing it lacked probable cause. He cited the timing of the suit, the
inappropriate invocation of unlimited jurisdiction, the lack of investigation
or discovery on the part of the county, the abusive nature of the county’s
responses to Jadwin’s discovery, the fact that both the federal court and the
arbitrator ruled against the county, and the county’s failure to present
evidence, either in arbitration or the trial court, to rebut the inference that
the suit was retaliatory.

Sacramento
attorney Mark Wasser represented the county on appeal. Eugene D. Lee of Los
Angeles, who represented Jadwin in the federal case—reportedly the first one he
had ever tried—represented him in the Court of Appeal along with Wendy C.
Lasher and John A. Hribar.